Sensitivity Analysis Sample and Examples for J&B

J&B INCORPORATED
SENSITIVITY ANALYSIS
FOR PERIOD MAY 1, 200W TO APRIL 31, 200X

 
Pessimistic
20% Decrease
in sales 		Original
Sales
Level 		Optimistic
15% Increase
in sales
SALES IN UNITS & DOLLARS:
Sales in Units per year  (note 1) 6,306 units 7,882 units 9,064 units
Weighted Average Selling Price (note 1) $73.89 $73.89 $73.89
TOTAL DOLLAR SALES * $465,950 $582,401 $669,739
VARIABLE COSTS:
Cost of Goods Sold  (note 2) $104,153 $130,191 $149,720
TOTAL VARIABLE COSTS * $104,153 $130,191 $149,720
FIXED COSTS:
Advertising Expense (note 3) $130,000 $130,000 $130,000
Wages & Employee Benefits (note 4) $122,366 $122,366 $122,366
Casual Labor (note 5) $ 2,400 $ 2,400 $ 2,400
Office Supplies (note 6) $ 1,500 $ 1,500 $ 1,500
Rent Expense (note 7) $ 12,000 $ 12,000 $ 12,000
Telephone/Fax Expense (note 8) $ 3,600 $ 3,600 $ 3,600
Professional Services (note 9) $ 7,000 $ 7,000 $ 7,000
Insurance Expenses (note 10) $ 1,500 $ 1,500 $ 1,500
Toll-free above Variable (note 11) $ 15,685 $ 15,685 $ 15,685
Bad Debt Expense (note 12) $ 5,824 $ 5,824 $ 5,824
Interest on Operating Loan (note 13) $ 2,000 $ 2,000 $ 2,000
Internet Storage & Accounts (note 14) $ 2,550 $ 2,550 $ 2,550
Miscellaneous Expenses (note 15) $ 2,400 $ 2,400 $ 2,400
Depreciation Exp. - Equipment (note 16) $ 3,142 $ 3,142 $ 3,142
Depreciation Exp.- Furniture (note 17) $ 606 $ 606 $ 606
Amortization of Initial R&D Costs (note 18) $ 15,924 $ 15,924 $ 15,924
Amortization of Future R&D Costs (note 19) $ 24,720 $ 24,720 $ 24,720
TOTAL FIXED COSTS * $353,218 $353,218 $353,218
TOTAL COSTS $457,371 $483,409 $502,938
Net Income Before Taxes $ 8,579 $ 98,992 $166,801
Less: Estimated Tax Rate (30%)  (note 20) $ 2,574 $ 29,698 $ 50,040
Net Income (Loss) After Taxes $ 6,005 $ 69,294 $116,761

*       - All Operating Expenses are considered Fixed Costs
**     - The only Variable Cost is J&B's Cost of Goods Sold
***   - Figures are rounded

 

Categories: Samples and Examples